An interesting perspective... I am not sure how the numbers were deveoped, as it seems pretty high to me... over head costs for the admin of the tax credit are spread over the same staff that handles other tax credits, I assume, so if tiese numbers are trying to attribute overhead to the credit, it would seem high...
It would be intersting to see the data on this, and the associated analysis...
Via
John Mulkey, Housing Guru (TheHousingGuru.com):
Many see the $8,000 first time buyer tax credit as an excellent stimulus for an ailing housing market; and some are seeking an expansion that would extend the credit to all home buyers. Others have proposed increasing the amount to $15,000. After all, spending such small amounts is insignificant when measured against the stimulus and bailout packages that have cost trillions.
The first time buyer tax credit was intended to stimulate housing, to bring in more buyers; and it has succeeded. Just like the Cash for Clunkers program stimulated new car sales, the housing stimulus has brought in more home buyers. But what if we discovered that the $8,000 number didn’t really cover the cost? What if we discovered the actual cost of bringing in each additional buyer wasn’t $8,000, but was more than 5 times that amount? Would it still seem like a good deal—like a fair deal?
Well that’s the cost, more than $40,000 per each additional buyer. And the estimate is probably on the conservative side. Based on numbers from the NAR, the program is expected to cost just over $15 billion; and when you divide that number by the projected number of additional homes sold, you discover the “real” cost to the American taxpayer.
Is it worth it? Will it help restore stability to the housing market? Probably not. But it did at least keep a few billion away from Wall Street and put it directly in the hands of consumers.
Source: Calculated Risk Blog
The Housing Guru: The one source for all your housing questions
Paul Silver, Owner
Focus Professionals, Inc.
Rhode Island Real Estate Services
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